Fired employee claims the $70 ceramic mugs are made in China, not Germany.

A former ArtsQuest employee claimed in a federal lawsuit this week that the $70 ceramic beer steins that Musikfest advertises as "handcrafted in Germany" are actually made in China.

Rebecca Stoneback, who taught a glassblowing class and worked in an ArtsQuest gift shop, alleges that in mid-March she found the steins in their original shipping boxes that show they came from China and told her superiors she wouldn't sell the steins unless they stopped advertising them as German-made.

She said in the suit that her concerns were dismissed and she was told the steins weren't made in China. The next day, she was told she was no longer needed at ArtsQuest, the nonprofit that puts on the German-themed, 10-day music and beer festival called Musikfest.

She's suing over her termination and has brought forth a class-action suit, claiming ArtsQuest "conspired to commit mail and wire fraud" by ordering custom Musikfest merchandise from Xiamen, China, and promoting it as coming from Germany.

The commercial invoice referenced in the suit shows 156 steins that cost ArtsQuest $3 each. The suit alleges that ArtsQuest sold the steins to the public for $69.99 each, "a 2,500 percent price increase."

If a judge certifies the suit as class action, the plaintiff's attorney said anyone who bought such merchandise over the last six years could be a potential plaintiff.

"Claiming that the merchandise is made in Germany is a large selling point of the Musikfest items," the suit says. "Bethlehem is rich in Dutch and German history, and Musikfest itself is a celebration of that history."

Musikfest began in 1984 with six "platzes" attracting about 100,000 people over 10 days to a festival spanning the area underneath the Hill-to-Hill Bridge and downtown Bethlehem. It now boasts 15 stages on both sides of the Lehigh River, including ArtsQuest's new SteelStacks campus. Attendance has sometimes exceeded one million in recent years and its studies have shown Musikfest packs a $39 million economic punch for the region.

One of the staples of the festival is the plastic, refillable beer mug — which is not the subject of the lawsuit.

Justin Swidler, whose law firm Swartz Swidler of Cherry Hill, N.J., brought the case, said he grew up in Bethlehem and knows the "very positive image" ArtsQuest has made for the city, but he said the suit speaks for itself.

At issue is the collectible ceramic steins billed on ArtsQuest's online store as "handcrafted in German" at the Gerz factory. The suit also calls into question the half-liter stoneware mug with decorative artwork, which is also described as "German made" in the plaintiff's reproduction of ArtsQuest's online store.

But the Gerz factory, according to the lawsuit, went bankrupt in 1997 and sold the rights of the factory. At least one of the companies to buy the rights was DOMEX, the company Stoneback says was on the label manifest on the shipping box of the steins, according to the suit.

The bottom of the Musikfest steins say "Design exclusively by Gerz" and indicates the company is in Germany, according to a photograph submitted with the suit. Another photograph described the 12-inch ceramic stein on ArtsQuest's online store as "handcrafted in Germany at the Gerz factory with a molded pewter lid" with just 325 made annually. Another picture shows a half-price sale where the steins sold for $34.99 and the 2008 anniversary mug at $49.99.

The website on Tuesday listed the steins as a Musikfest beer stein, but does not say it was handcrafted in Germany.

The suit over her termination, which also includes Director of Human Resources Cindy Karchner, alleges violations of the state Whistleblower Law.

Richard LaBarge, a Chicago attorney who specializes in unfair competition and trademark law, reviewed the complaints for The Morning Call.

He said allegations of "racketeering" are "are very unusual" in unfair competition cases aside from counterfeiting cases, such as counterfeit Gucci bags. The charge is punitive, allowing attorneys to go after legal fees.

He said the suit references a Pennsylvania statute protecting consumers that is similar to a federal act that prevents anyone in connection with goods or services to falsely designate the origin in commercial advertising or promotion.

"The issue for the judge to decide is what 'handcrafted means to the purchaser," LaBarge said. "If handcrafted means made — and I think that's a strong argument — then it would be a violation."

It would not be, he said, if a reasonable consumer would accept that hand-crafted means designed.

LaBarge also said he would argue that the act does not differentiate between whether the nonprofit knew about it or not.

"That shouldn't be a factor," he said. "It should be what consumers were led to believe."